Casino giant Caesars Entertainment has made its first big move since merging with Eldorado Resorts. The company has acquired William Hill, the sports book folks.
Caesars is purchasing William Hill for $3.7 billion, and the deal is expected to close in the second half of 2021.
Sports betting has taken off in recent years, despite our best efforts, and it’s clear Caesars Entertainment wanted a bigger piece of the action.
The purchase of William Hill wasn’t without some drama, of course. Apollo Global Management was also interested, but Caesars made it clear if Apollo won the bidding war, Caesars would pull the plug on its deal with William Hill.
William Hill has an existing partnership with Caesars Entertainment, running its sports book operations at Caesars casinos in 16 states across the U.S.
It sounds like Caesars will sell off William Hill’s overseas assets, including in the U.K., where William Hill is based.
As we are not a sports person, we’re sort of baffled by the Caesars Entertainment purchase of William Hill.
Caesars has about $8.8 billion in debt already, and this seems a hefty investment in a part of the casino business that brings in relatively little revenue.
Sports books tend to be an amenity for players, like salons and poker rooms.
For example, in August 2020, Nevada casinos made $17 million from sports betting. That’s all Nevada casinos, combined. Before taxes and expenses.
While $475 million was wagered, the “hold” was a mere 3.58 percent.
We keep hearing people talking about the “fast-growing legal sports betting industry in the U.S.,” so we’re probably missing something.
Casino companies are obviously betting big on the potential future growth of online sports wagering, and online gambling in general.
Ultimately, such acquisitions tend to be about data. Yours, specifically. Each of these companies have valuable databases, and now they get to share.
It’s unlikely sports bettors will see many changes to their favorite sports books resulting from this deal.
Opinions vary widely about William Hill, with approximately one percent of its customers kvetching 24/7, but the company pretty much owns the sports book realm in Las Vegas.
Sports, in general, is taking up more Las Vegas bandwidth, given its new big league teams, the Vegas Golden Knights and Las Vegas Raiders.
The bottom line: Good luck finding a Las Vegas bar or restaurant without sports on.
You can read more about “compelling strategic rationale” of the purchase of William Hill by Caesars Entertainment in the news release.
Or just read our superficial and clueless take on this “historic acquisition” again. You do you.